HHS Awards $3.06M Contract to Econometrica for Payment Standardization, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $3,059,171 ($3.1M)
Contractor: Econometrica, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2024-05-14
End Date: 2026-02-25
Contract Duration: 652 days
Daily Burn Rate: $4.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: TIME AND MATERIALS
Sector: Healthcare
Official Description: PAYMENT STANDARDIZATION CALCULATION AND APPLICATION
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20814
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $3.1 million to ECONOMETRICA, INC. for work described as: PAYMENT STANDARDIZATION CALCULATION AND APPLICATION Key points: 1. The contract focuses on payment standardization, a critical area for healthcare efficiency. 2. Econometrica, Inc. is the sole awardee, raising questions about competition. 3. The Time and Materials pricing model presents a risk for cost control. 4. The administrative management consulting sector is competitive, but this award appears limited.
Value Assessment
Rating: questionable
The contract is awarded on a Time and Materials basis, which can lead to costs exceeding initial estimates. Without a fixed price or clear ceiling, assessing value against similar contracts is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION' but is a delivery order, suggesting a potential pre-existing contract or limited scope. The Time and Materials pricing structure may not incentivize the most cost-effective solutions.
Taxpayer Impact: The potential for cost overruns due to the T&M pricing model could lead to inefficient use of taxpayer funds if not closely monitored.
Public Impact
Impacts healthcare payment systems and potentially provider reimbursements. Could lead to improved efficiency and reduced administrative burden in Medicare/Medicaid. Transparency in how standardization impacts patient costs is crucial.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials pricing
- Limited competition indicated by delivery order
- Potential for cost overruns
Positive Signals
- Addresses a critical area of healthcare administration
- Potential for improved payment system efficiency
Sector Analysis
This contract falls within the administrative management and general management consulting services sector, specifically for healthcare. Benchmarks for similar consulting services vary widely based on scope and expertise, but $3.06M for a 652-day duration is moderate.
Small Business Impact
The data does not indicate whether small businesses were involved in the competition or subcontracting. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The Time and Materials contract type necessitates robust monitoring to ensure cost control and adherence to project scope.
Related Government Programs
- Administrative Management and General Management Consulting Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Time and Materials pricing model
- Potential for cost overruns
- Limited visibility into competition details
- Lack of defined cost ceilings
Tags
administrative-management-and-general-ma, department-of-health-and-human-services, md, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $3.1 million to ECONOMETRICA, INC.. PAYMENT STANDARDIZATION CALCULATION AND APPLICATION
Who is the contractor on this award?
The obligated recipient is ECONOMETRICA, INC..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).
What is the total obligated amount?
The obligated amount is $3.1 million.
What is the period of performance?
Start: 2024-05-14. End: 2026-02-25.
What specific metrics will be used to measure the success of the payment standardization efforts?
Success metrics should focus on quantifiable improvements such as reduced payment processing times, decreased error rates in claims, and demonstrable cost savings for the Centers for Medicare and Medicaid Services. These metrics should be clearly defined in the contract's statement of work and regularly reviewed.
How will the agency ensure cost-effectiveness given the Time and Materials contract structure?
CMS must implement stringent oversight, including detailed tracking of labor hours and material costs, regular progress reviews, and potentially establishing cost ceilings or performance incentives. Independent cost analysis and comparison to industry benchmarks will be vital to prevent overspending.
What is the anticipated impact of this standardization on healthcare providers and patient billing?
The standardization aims to streamline payment processes, potentially reducing administrative burdens for providers and leading to more consistent billing for patients. However, the transition could introduce complexities, and clear communication channels with stakeholders are essential to manage expectations and address concerns.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 7475 WISCONSIN AVE STE 1000, BETHESDA, MD, 20814
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $5,393,017
Exercised Options: $3,059,171
Current Obligation: $3,059,171
Actual Outlays: $2,509,292
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: GS00F101CA
IDV Type: FSS
Timeline
Start Date: 2024-05-14
Current End Date: 2026-02-25
Potential End Date: 2029-05-14 00:00:00
Last Modified: 2026-02-23
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